Amid remarks about Taiwan, China halts rare-earth exports to Japan, exposing supply-chain risks and deepening regional tensions. Geopolitics collide with critical minerals again?
China has reportedly imposed an immediate ban on the export of selected rare-earth minerals and other dual-use items to Japan, thereby escalating tensions between the two major Asian economies.
The move follows controversial remarks by Japan’s Prime Minister on Taiwan, resulting in a sharp deterioration in bilateral relations.
China’s commerce ministry said the restrictions apply to materials and technologies that can be used for both civilian and military purposes. The decision takes effect immediately. Beijing said the measure was necessary to protect national security interests.
In November 2025, Prime Minister Sanae Takaichi said a Chinese military attack on Taiwan could constitute a threat to Japan’s survival. She also described a Taiwan crisis as an emergency for Japan and the Japan-US security alliance.
China, which claims Taiwan as its own territory, demanded that the remarks be withdrawn. Tokyo has refused. Beijing has since implemented a series of countermeasures, with rare-earth exports now in focus.
Japan strongly criticised the decision. Chief cabinet secretary Minoru Kihara said the action unfairly targeted Japan and departed from accepted international norms. He called the move unacceptable and deeply regrettable.
The impact on Japan could be significant. Despite diversification efforts, approximately 60 per cent of Japan’s rare-earth imports still come from China. Dependence is even higher for heavy rare earths used in magnets for electric and hybrid vehicle motors.
Economists warn of economic fallout if the ban persists. Nomura Research Institute estimates a three-month restriction could cut annual GDP by 0.11 per cent and cost businesses about ¥660 billion. A year-long ban could have a far larger effect.
China and Japan remain deeply linked through supply chains spanning electronics, machinery and vehicles. China is Japan’s largest trading partner by volume, while Japan is a key market for Chinese exports.
